Financial markets 'will continue to struggle'

03/03/2008

Financial markets in the UK and around the world are likely to continue to face difficult times, according to the chief executive of the Financial Services Authority (FSA) Hector Sants.

Mr Sants has made clear that there is unlikely to be cheap credit available to individuals or businesses in the UK in the near to medium-term future, which could lead many companies to turn to debtor finance.

An increasing number of British businesses are using invoice discounting services in light of the lending constraints of the banking sector and Mr Sants told the BBC recently that the effects of the credit crunch will continue to be felt around the world.

Financial and banking groups will "need to give consideration to how their business models will need to adjust to the changed market situations they have seen," said the FSA chief.

"The idea that at some point the loan availability will go back to normalcy, I think, is a misnomer," he added.

Meanwhile, Brian Solomon, editor of online news provider TMCnet, reported recently that factoring services are becoming more commonly used in a wider variety of industry sectors worldwide.